(a) The private party must, at its own cost, effect and maintain such insurances throughout the contract term as a prudent owner or service provider would obtain and maintain for the facility, including those insurances specified in the project agreement (being insurances of a kind and on no less favourable terms than the minimum insurance requirements specified in the project agreement).
(b) The private party must also ensure that it and its sub-contractors effect and maintain appropriate insurances in accordance with Good Industry Practice and at a prudent level of cover, having regard to the nature and scope of the services each sub-contractor is to provide. Levels of cover should be linked to the rate of inflation, such that the amount of insurance increases over time.
(c) Insurance requirements will reflect the degree of risk transfer, the ability of the private party to pay premiums (relative to the size of the risk), value for money considerations and the specifics of the particular project in question. Examples of required insurances during both the construction and operating periods include workers compensation insurance, property/material damage insurance, public/products liability insurance and motor vehicle insurance.
(d) In certain instances, insurances may be effected by means of the private party's existing group insurance policies, with appropriate care taken that these are extended to adequately cover the required project risks on an individual and aggregate basis.